TS Grewal solutions for अकाऊंटन्सी अनॅलिसिस ऑफ फाइनैन्शल स्टंटमेंट्स [इंग्रजी] इयत्ता १२ chapter 4 - Accounting Ratios [Latest edition]

Ratios that are calculated for measuring the efficiency of operations of business based on effective utilisation of resources are known as ______.

______ ratios indicate the speed at which activities of the business are being performed.

The Current Ratio of Magnum Ltd. is 2.5 : 1. Which of the following transactions will result in decrease in this ratio?

______ ratios are calculated to determine the ability of the business to service its debt in the long run.

Current Ratio is a type of ______.

Current Ratio is 2 : 1. On the sale of fixed asset (Book value ₹ 40,000) on ₹ 36,000 on credit,state whether the Current Ratio will ______.

The Quick Ratio of a company is 1 : 2. Which of the following transactions will result in an increase in this ratio?

If opening inventory is ₹ 1,20,000, Cost of Revenue from Operations is ₹ 10,00,000 and Inventory Turnover Ratio is 5 Times, then Closing Inventory will be ______.

Current Ratio is 2: 1 and Quick Ratio is 0.5: 1, a transaction involving decrease in both Current Ratio and Quick Ratio is ______.

If Current Ratio of a firm is 2.5 : 1 and its Current Liabilities are ₹ 4,00,000. Its Working Capital will be ______.

Non-current Assets of a firm are ₹ 26,00,000, Current Assets are ₹ 9,00,000 and Shareholders’ Funds are ₹ 21,50,000. Total debts of the firm will be ______.

Paras Ltd. has a Proprietary Ratio of 25%. To maintain this ratio at 30%, management may ______.

Working Capital is ₹ 7,20,000, Trade Payables ₹ 40,000; Other Current Liabilities ₹ 2,00,000, Calculate Current Ratio.

Current Assets are ₹ 10,00,000; Inventories ₹ 5,00,000, Working Capital ₹ 6,00,000, calculate Current Ratio.

Which of the following is/are not included in Current Assets to calculate Current Ratio?

The Quick Ratio of a company is 1 : 1. Which of the following transactions will result in increase in Quick Ratio?

The Quick Ratio of a company is 2 : 1. Which of the following transactions will result in decrease of this ratio?

If Total Assets are ₹ 1,25,000, Total Debts, i.e., external debts are ₹ 1,00,000 and Current Liabilities are ₹ 50,000, Debt-Equity Ratio will be ______.

The Debt Equity Ratio of Manak Enterprises is 2.5 : 1. Which of the following transactions will result in an increase in this ratio?

Choose the appropriate alternative from the given options:

Which of the following is not an activity ratio?

If Credit Revenue from Operations is ₹ 7,00,000, Cash Revenue from Operations is ₹ 1,00,000. Cost of Revenue from Operations is ₹ 6,40,000, then Gross Profit Ratio will be ______.

If Revenue from Operations is ₹ 1,60,000 and Gross Profit is ₹ 40,000, Gross Profit Ratio will bе ______.

If Revenue from Operations is ₹ 2,50,000 and Gross Profit Ratio is 25%, the amount of Gross Profit will bе ______.

Which is the correct formula of the following for computing the Operating Ratio:

If revenue from operations is ₹ 9,00,000; gross profit is 25% on cost and operating expenses are ₹ 90,000 the operating ratio will be:

Name the difference between Revenue from Operations and Operating Profit.

______ indicate the speed at which activities of the business are being performed.

From the following, which ratio is not a part of Profitability Ratio:

From the following information, calculate the Proprietary Ratio: Share Capital ₹ 5,00,000, Non-Current Assets ₹ 22,00,000, Reserves and Surplus ₹ 3,00,000, Current Assets ₹ 10,00,000.

Which of the following will increase Quick Ratio without affecting Current Ratio?

______ will result in increase in Liquid Ratio without affecting the Current Ratio.

The two basic measures of operational efficiency of a company are ______.

______ is also known as Acid-Test Ratio.

A transaction involving an increase in Current Ratio but no change in Working Capital:

A transaction involving a decrease in the Current Ratio and an increase in the Quick Ratio:

A transaction involving increase in both Current Ratio and Quick Ratio:

Name the aggregate of Shareholders’ Funds and Total Debts:

Name the difference between Capital Employed and Non-current Liabilities:

From the following calculate Interest coverage ratio:

Net profit after tax Rs 12,00,000; 10% debentures Rs 1,00,00,000; Tax Rate 40%

Current Ratio of Venus Ltd. is 3 : 2. lt is to be maintained at 2 : 1. Which of the following options are available?

1. He can repay bills payable
2. He can purchase goods on credit
3. He can take a short-term loan

Choose the correct option:

Which one of the following is correct?

1. Quick Ratio can be more than Current Ratio.
2. High Inventory Turnover ratio is good for the organisation, except when goods are bought in small lots or sold quickly at low margins to realise cash.
3. Sum of Operating Ratio and Operating Profit ratio is always 100%.

Which of the following is not correct?

______ will decrease Debt-Equity Ratio and will not change Current Ratio.

Net profit after tax is ₹ 1,20,000; 10% Debentures are of ₹ 2,00,000; Capital Employed is ₹ 16,00,000. Rate of tax is 40%. Return on Investment (ROI) will be ______.

If the Operating Ratio of Sana Ltd. is 28%, its Operating Profit Ratio will be ______.

Which of the following is not a Solvency Ratio?

A transaction involving decrease in debt-equity ratio and increase in current ratio is ______

Revenue from Operations10,00,000, Average Inventory 1,25,000, Gross Loss on Sales 25%. Find the Inventory Turnover Ratio.

Two basic measures of liquidity are ______.

To assess the operating efficiency with which resources are utilised, we may use ______.

Higher the ratio, the more favourable it is, does not stand true for ______.

Inventory in the beginning of the year is ₹ 1,20,000 and at the end is ₹ 2,00,000. Inventory Turnover Ratio is 8 Times. The Revenue from Operations is 25% above cost. The Gross Profit will be ______.

Which of the following are known as Efficiency Ratios?

Choose the correct equation with respect to capital employed from the following:

Match List I (Accounting Ratios) with List II (Formulae) and select the correct answer using the codes given below the lists:

Assertion (A): Accounting ratio is an expression of arithmetical relationship between two related items of accounting data.

Reason (R): Ratio is an analytical tool of data. When ratio analysis is applied to accounting data, the result is termed an accounting ratio.

In the context of the above two statements, which option is correct?

Assertion (A): A ratio is a quantitative aspect of results.

Reason (R): Ratio analysis establishes a relationship between two related items of financial statements.

In the context of the above two statements, which option is correct?

Assertion (A): Long-term financial position of a firm is assessed from Liquidity Ratios.

Reason (R): Liquidity Ratios, i.e., Current Ratio and Quick Ratio help in assessing Short-term financial position of the firm.

In the context of the above two statements, which option is correct?

Assertion (A): Debt means Long-term Liabilities.

Reason (R): Debt includes both Long-term and Short-term Liabilities.

In the context of the above two statements, which option is correct?

Assertion (A): Total Assets to Debt Ratio shows the financing of assets from Long-term Borrowings.

Reason (R): The formula for calculating the ratio is Total Assets/Debt. Thus, it shows Long-term Funds invested in the assets of the enterprise.

In the context of the above two statements, which option is correct?

Assertion (A): The Proprietary Ratio shows the proprietor’s funds invested in total assets.

Reason (R): The formula for calculating the ratio is Proprietors’ Funds/Total Assets. Thus, it shows the investment of Proprietors’ Funds in total assets.

In the context of the above two statements, which option is correct?

Assertion (A): Operating Ratio + Operating Profit Ratio = Revenue from Operations.

Reason (R): Operating Cost, when deducted from Revenue from Operations, gives the Operating Profit.

In the context of the above two statements, which option is correct?

Assertion (A): Operating Ratio is calculated to assess the operating efficiency of the enterprise.

Reason (R): Operating Ratio shows the percentage of Revenue from Operations absorbed as cost. If the ratio is low, it is considered to be better, as it means operating expenses are less.

In the context of the above two statements, which option is correct?

Assertion (A): Higher the Gross Profit Ratio, higher will be the profitability of a company.

Reason (R): Profitability Ratio includes not only Gross Profit Ratio and Net Profit Ratio but also includes all ratios assessing profitability.

In the context of the above two statements, which option is correct?

Assertion (A): Personal bias can be reflected in ratio analysis.

Reason (R): Different people may interpret the same ratio in different ways, which affects its reliability.

Assertion (A): Gross Profit Ratio is always higher than Net Profit Ratio.

Reason (R): To calculate Net Profit, Indirect Expenses are subtracted from Gross Profit and Indirect Incomes are added to Gross Profit.

Assertion (A): Redemption of debentures will not affect the Debt-Equity Ratio.

Reason (R): Debentures to be redeemed are Current Liabilities.

The current ratio of a company is 1.8 : 1, and its Quick Ratio is 1.6 : 1.

From the following transactions, choose the transaction which will increase both the current ratio and the quick ratio.

Both ______ are complementary to each other and thus, if one of such ratios is deducted from 100, another ratio is derived.

Which of the following are correct formulae for determining Equity/Shareholders’ Funds?

1. Non-Current Assets + Working Capital + Non-Current Liabilities
2. Non-Current Assets + (Current Assets - Current Liabilities) - Non-Current Liabilities
3. Share Capital + Reserves and Surplus
4. Capital Employed + Debt

Choose the most appropriate based on the above statements.

Which of the following are correct formulae for determining Capital Employed?

P. Capital + Reserves + Non-current Liabilities less Goodwill (existing in the Balance Sheet) less non-trade investment less fictitious assets.

Q. Capital + Reserves less Goodwill (existing in the balance sheet) less trade investments less Fictitious assets.

R. Total assets less Goodwill (existing in the balance sheet) less Non-trade investments less Fictitious assets less Outside Liabilities (Current and Non-current).

S. Total assets less Goodwill (existing in the balance sheet) less Non-trade investments less Fictitious assets less Outside Current Liabilities.

Choose the most appropriate option based on the above statements.

Liquid Ratio 1.5, Current Ratio 2, Inventory Turnover Ratio 6 Times, Total Current Assets ₹ 8,00,000. Goods are sold at 20% profit on sales. Revenue from Operations will be ______.

Revenue from Operations ₹ 5,00,000, Inventory Turnover Ratio 5 times, and Gross Profit Ratio 25%. What will be the value of closing inventory if closing inventory is ₹ 20,000 more than opening inventory?

Profit after Tax is ₹ 15,00,000, and Tax Rate is 20%, Profit before Interest and Tax is ₹ 25,00,000 and Long-term Borrowings is ₹ 62,50,000. Calculate Rate of Interest on Long-term Borrowings.

Net Profit after Interest but before Tax ₹ 1,40,000, 15% Long-term Borrowings ₹ 4,00,000, Tax Rate 50, Return on Capital Employed 25%. Calculate the amount of Shareholders’ Funds.

Current Ratio = `(₹ 2,00,000)/? = 4 : 1`

Debt to Equity Ratio = `?/(₹ 5,00,000) = 0.36 : 1`

Inventory Turnover Ratio = `(₹ 5,40,000)/((₹ 70,000 + ?)/2)` = 6 Times

Working Capital Turnover Ratio = `?/"Working Capital"`

Net Profit Ratio = `"Net Profit"/? xx ?`

Equity = Capital Employed − ___?___.

Equity = Non-current Assets + Current Assets − Current Liabilities − ___?___

Proprietors’ Funds = Non-current Assets + ___?___ − Non-current Liabilities.

Operating Cost = Cost of Revenue from Operations + ___?___

___?___ = Revenue from Operations − Operating Cost

Mercury Ltd. wanted to analyse their profitability position along with a check on their inventory level of past two years. The following data is available for your reference for the year ended:

During the year 2024–25, Inventory increased by 20%, Gross Profit is 25% on Cost of Revenue of Operations.

You are required to answer the following questions on the basis of the above information:

1. State the amount of Inventory increased during the year 2024–25.
   1. ₹ 72,000
   2. ₹ 40,000
   3. ₹ 60,000
   4. ₹ 36,000
2. Average Inventory of the year 2024–25 is ______.
   1. ₹ 3,30,000.
   2. ₹ 4,68,000.
   3. ₹ 4,56,000.
   4. ₹ 3,40,000.
3. Inventory Turnover Ratio of year 2024–25 is ______.
   1. 4.05 Times.
   2. 5.7 Times.
   3. 5.09 Times.
   4. 4.87 Times.
4. Inventory Turnover Ratio of 2025-26 is ______.
   1. 4.87 Times.
   2. 5.7 Times.
   3. 4.05 Times.
   4. 4.32 Times.

Star Ltd., an electronic company, is interested to analyse its credit policy and see how much amount is usually invested in Trade Receivables. Following information is provided by the company:

Cash Revenue from Operations is 20% of Total Revenue from Operations.

From the information given above, answer the following questions:

1. Revenue from Operations is ______.
   1. ₹ 3,80,000
   2. ₹ 4,80,000
   3. ₹ 4,00,000
   4. ₹ 4,60,000
2. Credit Revenue from Operations is  ______.
   1. ₹ 3,00,000
   2. ₹ 3,20,000
   3. ₹ 3,60,000
   4. ₹ 2,80,000
3. Gross Profit earned during the year is ______.
   1. ₹ 1,00,000
   2. ₹ 90,000
   3. ₹ 80,000
   4. ₹ 75,000
4. Closing Trade Receivables is ______.
   1. ₹ 1,00,000
   2. ₹ 1,05,000
   3. ₹ 1,10,000
   4. ₹ 1,20,000

Calculate current ratio from the following information:

Current Assets are ₹ 7,50,000 and Working Capital is ₹ 2,50,000. Calculate Current Ratio.

A company had Current Assets of ₹4,50,000 and Current Liabilities of ₹2,00,000. Afterwards it purchased goods for ₹30,000 on credit. Calculate Current Ratio after the purchase.

Current Liablilites of a company were ₹1,75,000 and its Current Ratio was 2:1. It paid ₹30,000 to a Creditor. Calculate Current Ratio after payment.

Working Capital ₹ 6,00,000, Total Debt ₹ 27,00,000, Non-current Liabilities ₹ 24,00,000. Calculate Current Ratio.

Working Capital is ₹ 18,00,000; Trade Payables ₹ 1,80,000; and Other Current Liabilities are ₹ 4,20,000. Calculate the current ratio.

Working Capital ₹ 9,00,000; Total Debts (Liabilities) ₹ 19,50,000; Long-Term Debts 15,00,000. Calculate Current Ratio.

Hints:

1. Current Liabilities = Total Debts − Long-term Debts.
2. Current Assets = Working Capital + Current Liabilities.

Trade Payables ₹ 50,000, Working Capital ₹ 9,00,000, Current Liabilities ₹ 3,00,000. Calculate Current Ratio.

Current Assets ₹ 20,00,000, Inventories ₹ 10,00,000, Working Capital ₹ 12,00,000. Calculate Current Ratio.

Hints:

Inventories are already included in Current Assets.

Current Liabilities = Current Assets − Working Capital.

Ratio of Current Assets (₹3,00,000) to Current Liabilities (₹2,00,000) is 1.5:1. The accountant of the firm is interested in maintaing a Current Ratio of 2:1 by paying off a part of the Current Liabilities. Compute amount of the Current Liabilities that should be paid so that the Current Ratio at the level of 2:1 may be maintained.

Ratio of Current Assets (₹8,75,000) to Current Liabilities (₹3,50,000) is 2.5:1 The firm wants to maintain Current Ratio of 2:1 by purchasing goods on credit. Compute amount of goods that should be purchased on credit.

A firm had Current Assets of ₹5,00,000. It paid Current Liabilities of ₹1,00,000 and the Current Ratio became 2:1. Determine Current Liabilities and Working Capital before and after the payment was made.

A firm had Current Liabilities of ₹ 5,40,000. It purchased stock of 60,000 on credit. After the purchase of stock, Current Ratio was 2 : 1. Calculate Current Assets and Working Capital after and before the stock was purchased.

State giving reason, whether the Current Ratio will improve or decline or will have no effect in each of the following transactions if Current Ratio is 2:1:

(a) Cash paid to Trade Payables.
(b) Bills Payable discharged.
(c) Bills Receivable endorsed to a creditor.
(d) Payment of final Dividend already declared.
(e) Purchase of Stock-in-Trade on credit.
(f) Bills Receivable endorsed to a Creditor dishonoured.
(g) Purchases of Stock-in-Trade for cash.
(h) Sale of Fixed Assets (Book Value of ₹50,000) for ₹45,000.
(i) Sale of FIxed Assets (Book Value of ₹50,000) for ₹60,000.

Current Assets ₹ 6,00,000; Inventories ₹ 1,20,000; Working Capital ₹ 5,04,000. Calculate the Quick Ratio.

Hints:

1. Quick Assets = Current Assets − Inventories.
2. Current Liabilities = Current Assets − Working Capital.

Quick Assets ₹ 3,00,000; Inventory (Stock) ₹ 80,000; Prepaid Expenses ₹ 20,000; Working Capital ₹ 2,40,000. Calculate the current ratio.

Hints:

1. Current Assets = Quick Assets + Inventory + Prepaid Expenses.
2. Current Liabilities = Current Assets − Working Capital.

Current Liabilities of a company are ₹ 15,00,000. Its Current Ratio is 3 : 1 and Liquid Ratio is 1 : 1. Calculate value of Inventory.

Xolo Ltd.'s Liquidity Ratio is 2.5 : 1. Inventory is ₹ 6,00,000. Current Ratio is 4 : 1. Find out the Current Liabilities.

Umesh Ltd. has Current Ratio of 4.5 : 1 and a Quick Ratio of 3 : 1. If its inventory is ₹  36,000, find out its total Current Assets and total Current Liabilities.

Current Ratio 4; Liquid Ratio 2.5; Inventory  ₹  6,00,000. Calculate Current Liabilities, Current Assets and Liquid Assets.

Current Liabilities of a company are  ₹  1,50,000. Its Current Ratio is 3 : 1 and Acid Test Ratio (Liquid Ratio) is 1 : 1. Calculate values of Current Assets, Liquid Assets and Inventory.

Current Assets of a company is are  ₹ 5,00,000. Its Current Ratio is 2.5 : 1 and Quick Ratio is 1 : 1. Calculate value of Current Liabilities, Liquid Assets and Inventory.

Working Capital  ₹  3,60,000; Total :Debts  ₹ 7,80,000; Long-term Debts ₹ 6,00,000; Inventories  ₹ 1,80,000. Calcltate Liquid Ratio.

Calculate the Quick Ratio from the following:

Working Capital ₹ 4,00,000; Total Debts ₹ 18,00,000, Non-Current Liabilities ₹ 16,00,000; Inventories ₹ 1,90,000; Prepaid Expenses ₹ 10,000.

Quick Ratio of a company is 2 : 1. State, giving reasons, which of the following transactions would (i) Improve, (ii) Reduce, (iii) Not change the Quick Ratio:

1. Purchase of goods for cash;
2. Purchase of goods on credit;
3. Sale of goods (costing ₹ 20,000) for ₹ 20,000;
4. Sale of goods (costing ₹ 20,000) for ₹ 22,000;
5. Cash received from Trade Receivables.

Quick Ratio of Z Ltd. is 1 : 1. State, with reason, which of the following transactions would (i) Increase (ii) Decrease or (iii) Not change the ratio:

1. Creditors of ₹ 10,000 were paid on due date;
2. Debentures of ₹ 50,000 were converted into equity shares.

The Quick Ratio of a company is 0.8:1. State with reason, whether the following transactions will increase, decrease or not change the Quick Ratio:
(i) Purchase of loose tools for ₹2,000; (ii) Insurance premium paid in advance ₹500; (iii) Sale of goods on credit ₹3,000; (iv) Honoured a bills payable of ₹5,000 on maturity.

Capital Employed ₹ 20,00,000; Fixed Assets ₹ 14,00,000; Current Liabilities ₹ 2,00,000. There are no Long-term Investments. Calculate Current Ratio.

Hint: Current Assets = Capital Employed + Current Liabilities − Fixed Assets.

Venus Ltd’s Inventory is ₹3,00,000. Total Liquid Assts are ₹12,00,000 and Quick Ratio is 2:1. Work out Current Ratio.

Hints:

1. `2/1 ("Quick Ratio") = ("Liquid Assets" (₹ 12,00,000))/"Current Liabilities"`

Current Liabilities =`(12,00,000)/2`= 6,00,000.

2. Current Assets = Liquid Assets + Inventory = ₹ 15,00,000.

Total Assets ₹ 11,00,000; Fixed Assets ₹ 5,00,000; Capital Employed ₹ 10,00,000. There were no Long-term Investments. Calculate Current Ratio.

Hints:

1. Current Assets = Total Assets − Fixed Assets.

2. Current Liabilities = Total Assets − Capital Employed.

From the following information, calculate the (i) Current Ratio and (ii) Quick Ratio:

Following is the Balance Sheet of Crescent Chemical Works Limited as at 31st March, 2026:

Compute Current Ratio and Liquid Ratio.

Total Assets ₹ 2,60,000; Total Debts ₹ 1,80,000; Current Liabilities ₹ 20,000. Calculate Debt to Equity Ratio. 

Calculate Debt to Equity Ratio: Equity Share Capital ₹ 5,00,000; General Reserve ₹ 90,000; Accumulated Profits ₹ 50,000; 10% Debentures ₹ 1,30,000; Current Liabilities ₹ 1,00,000.

From the following information, calculate Debt to Equity Ratio:

From the following information, calculate the Debt to Equity Ratio: Total Debts ₹ 6,00,000; Current Liabilities ₹ 2,00,000 and Capital Employed ₹ 6,00,000.

Calculate Debt to Equity Ratio: Total Assets ₹ 14,00,000; Total Debt ₹ 12,00,000; Capital Employed ₹ 10,00,000.

Capital Employed ₹8,00,000; Shareholders' Funds ₹2,00,000. Calculate Debt to Equity Ratio.

King Ltd. has Current Ratio of 2.5 : 1. Its Working Capital is 1,20,000. Total Assets are of 3,80,000 and Total Debt of 2,80,000.

Calculate Debt to Equity Ratio.

Monica Ltd. has a Quick Ratio of 1.5 : 1. Its Working Capital is ₹ 1,20,000, and its inventories are of ₹ 80,000. Total Assets of ₹ 3,80,000 and Total Debts of ₹ 2,80,000.

Calculate Debt to Equity Ratio.

When Debt to Equity Ratio is 2, state giving reason, whether this ratio will increase or decrease or will have no change in each of the following cases:
(i) Sale of Land (Book value ₹4,00,000) for ₹5,00,000; (ii) Issue of Equity Shares for the purchase of Plant and Machinery worth ₹10,00,000; (iii) Issue of Preference Shares for redemption of 13% Debentures, worth ₹10,00,000.

Debt to Equity Ratio of a company is 0.5:1. Which of the following suggestions would increase, decrease or not change it:

(i) Issue of Equity Shares:

(ii) Cash received from debtors:

(iii) Redemption of debentures;

(iv) Purchased goods on Credit?

Calculate Debt to Equity Ratio from the following information:

Assuming that the Debt to Equity Ratio is 2 : 1, state, giving reasons, which of the following transactions would  (i) increase; (ii) Decrease; (iii) Not alter Debt to Equity Ratio:

1. Issue of new shares for cash.
2. Conversion of debentures into equity shares.
3. Sale of a fixed asset at profit.
4. Purchase of a fixed asset on long-term deferred payment basis.
5. Payment to creditors.

Balance Sheet had the following amounts as at 31st March, 2019:

Calculate ratios indicating the Long-term and the Short-term financial position of the company.

From the following Balance Sheet of ABC Ltd. as at 31st March, 2026, Calculate Debt to Equity Ratio:

Calculate Total Assets to Debt Ratio from the following information:
Long-term Debts ₹ 4,00,000; total Assets  ₹ 7,70,000.

Total Debt ₹ 6,00,000; Current Liabilities ₹ 2,00,000, Capital Employed ₹ 6,00,000. Calculate the Total Assets to Debt Ratio.

Shareholders’ Funds  ₹ 1,60,000; Total Debts ₹ 3,60,000; Current Liabilities ₹ 40,000.

Calculate the Total Assets to Debt Ratio.

Hints:

1. Long-term Debts = Total Debts − Current Liabilities.
2. Total Assets = Long-term Debts + Shareholders’ Funds + Current Liabilities.

Total Debt ₹ 60,00,000; Shareholders’ Funds ₹ 10,00,000; Reserves and Surplus ₹ 2,50,000; Current Assets ₹ 25,00,000; Working Capital ₹ 5,00,000. Calculate Total Assets to Debt Ratio.

Hint: Reserves and Surplus are already included in Shareholders’ Funds.

Total Debt ₹ 12,00,000; Shareholders’ Funds ₹ 2,00,000; Reserves and Surplus ₹ 50,000; Current Assets ₹ 5,00,000; Working Capital ₹ 1,00,000. Calculate the Total Assets to Debt Ratio.

Hint: Reserves and Surplus are already included in Shareholders’ Funds.

Calculate ‘Total Assets to Debt ratio’ from the following information:

Hints:

1. Total Assets = Total Liabilities = Equity Share Capital + Long-term Borrowings + Surplus, i.e., Balance in Statement of Profit & Loss + General Reserve + Current Liabilities + Long-term Provisions = 9,00,000.
2. Debt = Long-term Borrowings + Long-term Provisions = ₹ 3,00,000.

From the following information, calculate the Total Assets to Debt Ratio:

From the following information, calculate Proprietary Ratio:

Calculate Proprietary Ratio from the following:

From the following information, calculate the Proprietary Ratio:

Calculate the Proprietary Ratio if the Total Assets to Debt Ratio is 2 : 1. Debt is ₹ 5,00,000. Equity Shares Capital is 0.5 times the debt. Preference Shares Capital is 25% of equity share capital. Net profit before tax is ₹ 10,00,000, and the rate of tax is 40%.

State with reason, whether the Proprietary Ratio will improve, decline or will not change because of the following transactions if Proprietary Ratio is 0.8 : 1:

(i) Obtained a loan of ₹ 5,00,000 from State Bank of India payable after five years.
(ii) Purchased machinery of ₹ 2,00,000 by cheque.
(iii) Redeemed 7% Redeemable Preference Shares ₹ 3,00,000.
(iv) Issued equity shares to the vendor of building purchased for ₹ 7,00,000.
(v) Redeemed 10% redeemable debentures of ₹ 6,00,000.

From the following information, calculate:

1. Proprietary Ratio;
2. Debt to Equity Ratio; and
3. Total Assets to Debt Ratio.

Hint: Debt = ₹ 40,00,000; Total Assets = ₹ 80,00,000, Proprietors’ Funds/Equity = ₹ 20,00,000.

From the following information, calculate:

1. Proprietary Ratio;
2. Debt to Equity Ratio; and
3. Total Assets to Debt Ratio.

Hints:

1. Current Liabilities = Current Assets − Working Capital = ₹ 6,00,000.
2. Debt = Total Debts − Current Liabilities = ₹ 12,00,000.
3. Total Assets = Capital Employed + Current Liabilities = ₹ 21,00,000.

Net Profit before Interest and Tax is ₹ 10,00,000, and 10% of Long-term Borrowings is ₹ 20,00,000. Calculate the Interest Coverage Ratio.

From the following information, calculate the Interest Coverage Ratio: Net Profit after Tax ₹ 4,25,000; Tax ₹ 75,000; Interest on Long-term Funds ₹ 1,25,000.

Hint: Find Profit before Interest and Tax by adding Profit after Tax, Tax and Interest.

From the following information, calculate the Interest Coverage Ratio:

Net profit after interest and tax ₹ 1,20,000; Rate of income tax; 40%; 15% Debentures ₹ 1,00,000; 12% Mortgage loan ₹ 1,00,000.

From the following information, calculate the Interest Coverage Ratio:

Hint: Profit before Interest and Tax is ₹ 94,000 (i.e.,₹ 75,000 + ₹9,000 +₹ 5,000 +₹ 5,000).

From the following information, calculate the Debt to Capital Employed Ratio:

From the following, calculate the ‘Debt to Capital Employed Ratio’:

From the following information, calculate the Debt to Capital Employed Ratio:

Calculate the Debt to Capital Employed Ratio from the following information:

Calculate Debt to Capital Employed Ratio from the following information:

Total Debts ₹ 60,00,000; Current Assets ₹ 25,00,000; Non-Current Assets ₹ 95,00,000; Working Capital ₹ 5,00,000.

From the following, calculate the Debt to Capital Employed Ratio:

10% Preference Share Capital ₹ 5,00,000; Equity Share Capital ₹ 15,00,000; Securities Premium ₹ 1,00,000, Reserves and Surplus ₹ 2,00,000, 9% Loan from IDBI ₹ 30,00,000.

Hint: Securities Premium is already included in Reserves and Surplus.

Calculate the Debt to Capital Employed Ratio from the following information:

Debt to Equity Ratio 2 : 1; Long-term Borrowings ₹ 18,00,000; Long-term Provision ₹ 6,00,000; Reserves and Surplus ₹ 2,00,000.

Debt to Capital Employed Ratio of a company is 0.4 : 1. State giving reasons, which of the following will improve, reduce or not change the ratio?

1. Sale of Machinery at a loss of ₹ 50,000.
2. Purchase of Stock-in-Trade on credit of two months for ₹ 80,000.
3. Conversion of Debentures into Equity Shares of ₹ 5,00,000.
4. Purchase of Fixed Assets for ₹ 4,00,000 on a long-term deferred payment basis.

From the following details, calculate the Inventory Turnover Ratio:

Cost of Revenue from Operations ₹ 5,00,000; Purchases ₹ 5,50,000; Opening Inventory ₹ 1,00,000.

Calculate Inventory Turnover Ratio.

Hint: Closing Inventory = Opening Inventory + Purchases − Cost of Revenue from Operations.

Calculate Inventory Turnover Ratio from the following information:

Opening Inventory is ₹50,000; Purchases ₹3,90,000; Revenue from Operations, i.e., Net Sales ₹6,00,000; Gross Profit Ratio 30%.

From the following information, calculate the Inventory Turnover Ratio:

From the following information, calculate the inventory turnover ratio: Revenue from operations Rs. 16,00,000; Average Inventory Rs. 2,20,000; Gross Loss Ratio 5%.

Hint: Cost of Revenue from Operations = Revenue from Operations + Gross Loss

= ₹ 16,00,000 + ₹ 80,000 (ie, 5% of ₹ 16,00,000) = ₹ 16,80,000.

Revenue from Operations ₹4,00,000; Gross Profit ₹1,00,000; Closing Inventory ₹1,20,000; Excess of Closing Inventory over Opening Inventory ₹40,000. Calculate Inventory Turnover Ratio.

From the following data, calculate the Inventory Turnover Ratio:

Total Sales ₹ 10,00,000; Sales Return ₹ 1,00,000; Gross Profit ₹ 1,80,000; Closing Inventory ₹ 2,00,000; Excess of Closing Inventory over Opening Inventory ₹ 40,000.

₹2,00,000 is the Cost of Revenue from Operations (Cost of Goods Sold), during the year. If Inventory Turnover Ratio is 8 times, calculate inventories at the end of the year. Inventories at the end is 1.5 times that of in the beginning.

From the following information obtained from the books of Kundan Ltd., calculate the inventory turnover ratio for the years 2015-16 and 2016-17:

In the year 2015-16, inventory increased by Rs 2,00,000.

Calculate Inventory Turnover Ratio from the following information:

Opening Inventory ₹ 40,000; Purchases ₹ 3,20,000; and Closing Inventory ₹ 1,20,000.
State, giving reason, which of the following transactions would (i) increase, (ii) decrease, (iii) neither increase nor decrease the Inventory Turnover Ratio:
(a) Sale of goods for ₹ 40,000 (Cost ₹ 32,000).
(b) increase in the value of Closing Inventory by ₹ 40,000.
(c) Goods purchased for ₹ 80,000.
(d) Purchases Return ₹ 20,000.
(e) goods costing ₹ 10,000 withdrawn for personal use.
(f) Goods costing ₹ 20,000 distributed as free samples.

From the following Information, calculate the Inventory Turnover Ratio:

Credit Revenue from Operations ₹ 6,00,000; Cash Revenue from Operations ₹ 2,00,000; Gross Profit 25% of Cost; Closing Inventory was 3 times the Opening Inventory. Opening Inventory was 10% of Cost of Revenue from Operations.

Following figures have been extracted from Shivalika Mills Ltd.

From the following information, calculate value of Opening Inventory:

Goods are sold at a profit of 25% on cost. 

From the following information, determine Opening and Closing inventories:

Inventory Turnover Ratio 5 Times, Total sales ₹ 2,00,000, Gross Profit Ratio 25%. Closing Inventory is more by ₹ 4,000 than the Opening Inventory.

Inventory Turnover Ratio 5 times; Cost of Revenue from Operations (Cost of Goods Sold) ₹ 18,90,000. Calculate Opening Inventory and Closing Inventory if Inventory at the end is 2.5 times more than that in the beginning.

The average inventory of AB Ltd. is ₹ 1,00,000 and the inventory turnover ratio is 6 times. Calculate the amount of revenue from operations if goods are sold at a profit of 25% on revenue from operations. 

Calculate Trade Receivables Turnover Ratio from the following information:

Total Sales ₹ 1,00,000; Sales Return ₹ 1,500; Cash Sales ₹ 23,500.

Hint: Provision for Doubtful Debts is not deducted from Trade Receivables (i.e., Debtors + Bills Receivable) to calculate Trade Receivables Turnover Ratio.

Closing Trade Receivables ₹ 90,000, Revenue from Operations ₹ 7,20,000, Cash Revenue from Operations ₹ 1,80,000. Provision for Doubtful Debts ₹ 8,000. Calculate Trade Receivables Turnover Ratio.

Closing Trade Receivables ₹ 1,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 40,000; Revenue from Operations, i.e., Net Sales ₹ 6,00,000. Calculate Trade Receivables Turnover Ratio. 

Compute Trade Receivables Turnover Ratio from the following:

Closing Trade Receivables ₹ 1,20,000, Revenue from Operations ₹ 14,40,000. Provision for Doubtful Debts ₹ 20,000. Calculate Trade Receivables Turnover Ratio.

Closing Trade Receivables ₹ 4,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 2,00,000; Revenue from Operations, i.e., Net Sales ₹ 15,00,000. Calculate Trade Receivables Turnover Ratio.

[Hint: 1.  Net Credit Sales = Total Sales − Cash Sales

= ₹ 15,00,000 − 20% of ₹ 15,00,000 = ₹ 12,00,000.
2.  Opening Trade Receivables = Closing Trade Receivables − Excess of Closing Trade Receivables over Opening Trade Receivables.]

A firm normally has trade Receivables equal to two months' credit Sales. During the coming year it expects Credit Sales of ₹ 7,20,000 spread evenly over the year (12 months). What is the estimated amount of Trade Receivables at the end of the year?

Mercury Ltd. company made Credit Sales of ₹ 4,00,000 during the financial period. If the collection period is 36 days and the year is assumed to be 360 days, calculate:

1. Trade Receivables Turnover Ratio;
2. Average Trade Receivables;
3. Trade Receivables at the end when Trade Receivables at the end are more than that in the beginning by ₹ 6,000.

Calculate Trade Receivables Turnover Ratio in each of the following alternative cases:
Case 1: Net Credit Sales ₹4,00,000; Average Trade Receivables ₹1,00,000.

Case 2: Revenue from Operations (Net Sales) ₹30,00,000; Cash Revenue from Operations, i.e., Cash Sales ₹6,00,000; Opening Trade Receivables ₹2,00,000; Closing Trade Receivables ₹6,00,000.

Case 3: Cost of Revenue from Operations or Cost of Goods Sold ₹3,00,000; Gross Profit on Cost 25%; Cash Sales 20% of Total Sales; Opening Trade Receivables ₹50,000; Closing Trade Receivables ₹1,00,000.

Case 4: Cost of Revenue from Operations or Cost of Goods Sold ₹4,50,000; Gross Profit on Sales 20%; Cash Sales 25% of Net Credit Sales, Opening Trade Receivables ₹90,000; Closing Trade Receivables ₹60,000.

From the information given below, calculate Trade Receivables Turnover Ratio:
Credit Revenue from Operations, i.e., Credit Sales ₹8,00,000; Opening Trade Receivables ₹1,20,000; and Closing Trade Receivables ₹2,00,000.
State giving reason, which of the following would increase, decrease or not change Trade Receivables Turnover Ratio:
(i) Collection from Trade Receivables ₹40,000.
(ii) Credit Revenue from Operations, i.e., Credit Sales ₹80,000.
(iii) Sales Return ₹20,000.
(iv) Credit Purchase ₹1,60,000.

From the following information, calculate Opening Trade Receivables and Closing Trade Receivables:

Trade Receivables Turnover Ratio - 4 times

Closing Trade Receivables were ₹ 20,000 more than that in the beginning.

Cost of Revenue from operations - ₹ 6,40,000.

Cash Revenue from operations `1/3`rd of Credit Revenue from Operations Gross Profit Ratio - 20%

₹ 1,75,000 is the Credit Revenue from Operations, i.e., Net Credit Sales of an enterprise. If Trade Receivables Turnover Ratio is 8 times, calculate Trade Receivables in the Beginning and at the end of the year. Trade Receivables at the end is ₹ 7,000 more than that in the beginning.

From the following information, calculate Opening and Closing Trade Receivables, if Trade Receivables Turnover Ratio is 3 Times:

(i) Cash Revenue from Operations is 1/3rd of Credit Revenue from Operations.
(ii) Cost of Revenue from Operations is ₹3,00,000.
(iii) Gross Profit is 25% of the Revenue from Operations.
(iv) Trade Receivables at the end are 3 Times more than that of in the beginning. 

Cash Revenue from Operations (Cash Sales) ₹ 2,00,000, Cost of Revenue from Operations or Cost of Goods Solds ₹ 3,50,000; Gross Profit ₹ 1,50,000; Trade Receivables Turnover Ratio 3 Times. Calculate Opening and Closing Trade Receivables in each of the following alternative cases:
Case 1: If Closing Trade Receivables were ₹ 1,00,000 in excess of Opening Trade Receivalbes.
Case 2: If trade Receivables at the end were 3 times than in the beginning.
Case 3: If trade Receivables at the end were 3 times more than that of in the beginning.

Calculate Trade payables Turnover Ratio from the following information:
Opening Creditors ₹ 1,25,000; Opening Bills Payable ₹ 10,000; Closing Creditors ₹ 90,000; Closing bills Payable ₹ 5,000; Purchases ₹ 9,50,000; Cash Purchases ₹ 1,00,000; Purchases Return ₹ 45,000.

Calculate Trade Payables Turnover Ratio and Average Debt Payment Period from the following information:

Closing Trade Payables ₹ 5,40,000, Net Purchases ₹ 43,20,000. Cash Purchases ₹ 10,80,000. Calculate Trade Payables Turnover Ratio.

Calculate Trade Payables Turnover Ratio for the year 2022-23 in each of the alternative cases:
Case 1: Closing Trade Payables ₹ 45,000; Net Purchases ₹ 3,60,000; Purchases Return ₹ 60,000; Cash Purchases ₹ 90,000.
Case 2: Opening Trade Payables ₹ 15,000; Closing Trade Payables ₹ 45,000; Net Purchases ₹ 3,60,000. 
Case 3: Closing Trade Payables ₹ 45,000; Net Purchases ₹ 3,60,000.
Case 4: Closing Trade Payables (including ₹ 25,000 due to a supplier of machinery) ₹ 55,000; Net Credit Purchases ₹ 3,60,000.

Hint: Case 4: A creditor for machinery has been excluded since he does not arise from the purchase of goods in which the firm deals in.

From the following information, calculate the opening and Closing Trade Payables:

Cash Purchases 25% of Total Purchases; Revenue from Operations ₹ 3,00,000; Gross Profit 25% on Revenue from Operations; Opening Inventory ₹ 75,000; Closing Inventory ₹ 1,50,000; Trade Payables Turnover Ratio 3 Times; Closing Trade Payables were ₹ 75,000 in excess of Opening Trade Payables.

Hints:

1. Cost of Revenue from Operations = ₹ 2,25,000.

2. Total Purchases = Cost of Revenue from Operations + Closing Inventory − Opening Inventory

= ₹ 2,25,000 + ₹ 1,50,000 − ₹ 75,000

= ₹ 3,00,000

3. Net Credit Purchases = Total Purchases − Cash Purchases

= ₹ 3,00,000 − ₹ 75,000

= ₹ 2,25,000

From the following information, calculate Working Capital Turnover Ratio:

Revenue from Operations: Cash Sales ₹ 5,00,000; Credit Sales ₹ 6,00,000; Sales Return ₹ 1,00,000. Current Assets ₹ 3,00,000; Current Liabilities ₹ 1,00,000. Calculate Working Capital Turnover Ratio.

Equity Share Capital ₹ 15,00,000; Gross Profit on Revenue from Operations, i.e., Net Sales `33 1/3`%;  Cost Revenue from Operatins or Cost of Goods Sold ₹ 20,00,000; Current Assets ₹ 10,00,000; Current Liabilities ₹ 2,50,000. Calculate Working Capital Turnover Ratio 

Capital Employed ₹ 12,00,000; Net Fixed Assets ₹ 8,00,000; Cost of Goods Sold or Cost of Revenue from Operations ₹ 40,00,000; Gross Profit is 20% on Cost. Calculate Working Capital Turnover Ratio.

Hint: Working Capital = Capital Employed − Net Fixed Assets

Calculate Working Capital Turnover Ratio from the following information: Revenue from Operations ₹ 15,00,000; Current Assets ₹ 6,25,000; Total Assets ₹ 10,00,000; Non-current Liabilities ₹ 5,00,000; Shareholders’ Funds ₹ 2,50,000.

Gross Profit at 25% on cost; Gross profit ₹ 5,00,000; Equity Share Capital ₹ 10,00,000; Reserves and Surplus  2,00,000; Long-term Loan  3,00,000; Fixed Assets (Net) ₹ 10,00,000. Calculate Working  Capital Turnover Ratio

Hint: Working Capital = ₹ 5,00,000; Total Sales = ₹ 25,00,000.

A company earns Gross Profit of 25% on cost. For the year ended 31st March, 2017 its Gross Profit was ₹ 5,00,000; Equity Share Capital of the company was ₹ 10,00,000; Reserves and Surplus ₹ 2,00,000; Long-term Loan ₹ 3,00,000 and Non-current Assets were ₹ 10,00,000.
Compute the 'Working Capital Turnover Ratio' of the company.

Net Fixed Assets ₹ 5,00,000, Revenue from Operations ₹ 25,00,000. Calculate the Fixed Assets Turnover Ratio.

Fixed Assets (at Cost) ₹ 7,00,000, Accumulated Depreciation ₹ 1,00,000, Credit Revenue from Operations 17,00,000, Cash Revenue from Operations 1,00,000. Calculate the Fixed Assets Turnover Ratio.

Capital Employed ₹ 2,50,000, Working Capital ₹ 50,000, Cost of Revenue from Operations ₹ 8,00,000, Gross Profit ₹ 2,00,000. Calculate the Fixed Assets Turnover Ratio.

Capital Employed ₹ 30,00,000; Working Capital ₹ 5,00,000; Cost of Revenue from Operations ₹ 40,00,000; Gross Profit 25% of Cost. Calculate the Fixed Assets Turnover Ratio.

Following information is of Raja Ltd. for 2 years. Calculate the Fixed Assets Turnover Ratio:

Based on the following information, calculate Net Assets or Capital Employed Turnover Ratio: Shareholders’ Funds ₹ 20,00,000; Equity Share Capital ₹ 10,00,000; Reserves and Surplus ₹ 10,00,000; 8% Debentures ₹ 10,00,000; and Revenue from Operations ₹ 75,00,000.

Hint: In the absence of information on assets and current liabilities, the ratio can be calculated based on Capital Employed. Net Assets Turnover Ratio is also known as Capital Employed Turnover Ratio.

From the following information, calculate the Net Assets Turnover Ratio:

Equity Share Capital ₹ 15,00,000; Long-term Borrowings ₹ 30,00,000; Reserves and Surplus 5,00,000; Non-current Assets ₹ 32,00,000; Revenue from Operations ₹ 1,00,00,000.

Property, Plant and Equipment and Intangible Assets (at cost) ₹ 30,00,000; Accumulated Depreciation ₹ 5,00,000; Trade Investments ₹ 2,50,000; Current Assets ₹ 11,00,000; Current Liabilities ₹ 8,50,000; Cash Revenue from Operations ₹ 10,00,000; Credit Revenue from Operations ₹ 40,00,000.

Calculate Net Assets Turnover Ratio.

Property, Plant and Equipment and Intangible Assets ₹ 10,00,000; Working Capital ₹ 5,00,000; Cost of Revenue from Operations ₹ 50,00,000; Gross Profit 20% of Cost. Calculate the Net Assets or Capital Employed Turnover Ratio.

Shareholders’ Funds ₹ 10,00,000; Long-term Debts ₹ 20,00,000; Gross Profit at 20% on cost was ₹ 20,00,000. Calculate the Net Assets or Capital Employed Turnover Ratio.

From the following Balance Sheet of Akhil Ltd. as at 31st March, 2026, calculate (i) Net Assets Turnover Ratio and (ii) Fixed Assets Turnover Ratio:

From the following, calculate Gross Profit Ratio:
Gross Profit:₹50,000; Revenue from Operations ₹5,00,000; Sales Return: ₹50,000.

Compute Gross Profit Ratio from the following information:
Cost of Revenue from Operations (Cost of Goods Sold) ₹5,40,000; Revenue from Operations (Net Sales) ₹6,00,000.

Compute Gross Profit Ratio from the following information:
Revenue from Operations, i.e., Net Sales = ₹4,00,000; Gross Profit 25% on Cost.

Calculate Gross Profit Ratio from the following data:
Cash Sales are 20% of Total Sales; Credit Sales are ₹5,00,000; Purchases are ₹4,00,000; Excess of Closing Inventory over Opening Inventory ₹25,000.

From the following information, calculate the Gross Profit Ratio:

From the following information, calculate Gross Profit Ratio:

Hint: Revenue from Operations means Net Sales.

Opening Inventory ₹ 2,00,000; Closing Inventory ₹ 1,20,000. Inventory Turnover Ratio 8 Times; Selling price 25% above cost. Calculate Gross Profit Ratio.

A Trader carries an Average Inventory of ₹ 1,00,000. His Inventory Turnover Ratio is 8 Times. He sells goods at a profit of 25% of cost. Calculate Gross Profit Ratio.

Calculate Gross Profit Ratio from the following data:

Average Inventory ₹3,20,000; Inventory Turnover Ratio 8 Times; Average Trade Receivables ₹4,00,000; Trade Receivables Turnover Ratio 6 Times; Cash Sales 25% of Net Sales.

(i) Revenue from Operations: Cash Sales ₹4,20,000; Credit Sales ₹6,00,000; Return ₹20,000. Cost of Revenue from Operations or Cost of Goods Sold ₹8,00,000. Calculate Gross Profit Ratio.
(ii) Average Inventory ₹1,60,000; Inventory Turnover Ratio is 6 Times; Selling Price 25% above cost. Calculate Gross Profit Ratio.
(iii) Opening Inventory ₹1,00,000; Closing Inventory ₹60,000; Inventory Turnover Ratio 8 Times; Selling Price 25% above cost. Calculate Gross Profit Ratio.

Gross Profit Ratio of a company is 25%. State giving reason, which of the following transactions will (a) increase or (b) decrease or (c) not alter the Gross Profit Ratio.
(i) Purchases of Stock-in-Trade ₹50,000.
(ii) Purchases Return ₹15,000.
(iii) Cash Sale of Stock-in-Trade ₹40,000.
(iv) Stock-in-Trade costing ₹20,000 withdrawn for personal use.
(v) Stock-in-Trade costing ₹15,000 distributed as free sample.

Revenue from Operations ₹ 12,00,000; Cost of Revenue from Operations ₹ 5,00,000. Operating Cost ₹ 6,00,000. Calculate the Operating Ratio.

Cost of Revenue from Operations ₹ 3,00,000. Operating Expenses ₹ 1,20,000. Revenue from Operations: ₹ 5,00,000. Calculate the Operating Ratio.

Operating Ratio 92%; Operating Expenses ₹ 94,000; Revenue from Operations ₹ 6,00,000; Sales Return ₹ 40,000. Calculate Cost of Revenue from Operations (Cost of Goods Sold).

From the following information, calculate the Operating Ratio:

Revenue from Operations ₹ 10,00,000; Cost of Revenue from Operations ₹ 4,00,000; Selling Expenses ₹ 80,000; Administrative Expenses ₹ 1,20,000. Goods were sold at a profit of 25% on cost.

From the following information, calculate Operating Ratio:

Calculate Cost of Revenue from Operations from the following information:
Revenue from Operations ₹ 12,00,000; Operating Ratio 75%; Operating Expenses ₹ 1,00,000.

Calculate Operating Ratio from the following information:
Operating Cost ₹ 6,80,000; Gross Profit 25%; Operating Expenses ₹ 80,000.

Hints:

1. Operating Cost = Cost of Revenue from Operations + Operating Expenses

₹ 6,80,000 = Cost of Revenue from Operations + ₹ 80,000

Cost of Revenue from Operations = ₹ 6,00,000

2. Revenue from Operations = ₹ 6,00,000 × 100/75 = ₹ 8,00,000.

(i) Cost of Revenue from Operations (Cost of Goods Sold) ₹ 2,20,000; Revenue from Operations (Net Sales) ₹ 3,20,000; Selling Expenses ₹ 12,000; Office Expenses ₹ 8,000; Depreciation ₹ 6,000. Calculate Operating Ratio.

(ii) Revenue from Operations, Cash Sales ₹ 4,00,000; Credit Sales ₹ 1,00,000; Gross Profit ₹ 1,00,000; Office and Selling Expenses ₹ 50,000. Calculate Operating Ratio.

Hint: (i) Operating Expenses = Selling Expenses + Office Expenses + Depreciation.

Calculate Operating Profit Ratio from the Following:

Calculate Operating Profit Ratio from the following information: 

Revenue from Operations ₹ 9,00,000; Gross Profit 25% on Cost; Operating Expenses ₹ 45,000. Calculate Operating Profit Ratio.

Operating Cost ₹ 3,40,000; Gross Profit Ratio 20%; Operating Expenses ₹ 20,000. Calculate Operating Profit Ratio.

What will be the Operating Profit Ratio, if Operating Ratio is 82.59%?

Calculate the Operating Profit Ratio in each of the following alternative cases:

Case 1: Revenue from Operations (Net Sales) ₹ 20,00,000; Operating Profit ₹ 3,00,000.

Case 2: Revenue from Operations (Net Sales) ₹ 6,00,000; Operating Cost ₹ 5,10,000.

Case 3: Revenue from Operations (Net Sales) ₹ 3,60,000; Gross Profit 20% on Sales; Operating Expenses ₹ 18,000.

Case 4: Revenue from Operations (Net Sales) ₹ 4,50,000; Cost of Revenue from Operations ₹ 3,60,000; Operating Expenses ₹ 22,500.

Case 5: Cost of Goods Sold, i.e., Cost of Revenue from Operations ₹ 4,00,000; Gross Profit 20% on Sales; Operating Expenses ₹ 25,000.

Operating Profit Ratio of Star Ltd. is 20%. State, giving reason, which of the following transactions will (i) increase, (ii) decrease, or (ii) not alter the Operating Profit Ratio:

1. Purchase of Stock-in-Trade ₹ 1,00,000.
2. Purchase returns ₹ 20,000.
3. Revenue from Operations on sale of Stock-in-Trade ₹ 1,25,000.
4. Stock-in-Trade costing ₹ 25,000 withdrawn for personal use.

Assuming that operating cost is variable, i.e., varies with Revenue from Operations.

Revenue from Operations, i.e., Net Sales: ₹ 30,00,000; Net Profit: ₹ 3,00,000. Calculate the Net Profit Ratio.

Cash Sales ₹ 2,20,000; Credit Sales ₹ 3,00,000; Sales Return ₹ 20,000; Gross Profit ₹ 1,00,000; Operating Expenses ₹ 25,000; Non-operating incomes ₹ 30,000; Non-operating Expenses ₹ 5,000. Calculate Net Profit Ratio.

Revenue from Operations, i.e., Net Sales ₹ 8,20,000; Return ₹ 10,000; Cost of Revenue from Operations (Cost of Goods Sold) ₹ 5,20,000; Operating Expenses ₹ 2,09,000; Interest on Debentures ₹ 40,500; Gain (Profit) on Sale of a Fixed Asset ₹ 81,000. Calculate Net Profit Ratio. 

Revenue from Operations ₹ 4,00,000; Gross Profit Ratio 25%; Operating Ratio 90%. Non-operating Expenses ₹ 2,000; Non-operating Income ₹22,000. Calculate Net Profit Ratio.

Net Profit before Interest and Tax ₹2,50,000; Capital Employed ₹10,00,000. Calculate Return on Investment.

Net Profit before Interest and Tax ₹6,00,000; Net Fixed Assets ₹20,00,000; Net Working Capital ₹10,00,000; Current Assets ₹11,00,000. Calculate Return on Investment.

Net Profit before Interest and Tax ₹4,00,000; 15% Long-term Debt ₹8,00,000; Shareholders' Funds ₹4,00,000. Calculate Return on Investment.

Net Profit after interest but before tax ₹ 1,40,000; 15% Long-term Debts ₹ 4,00,000; Shareholders’Funds ₹ 2,40,000; Tax Rate 50%. Calculate Return on Capital Employed.

With the help of the following information, calculate Return on Investment:

Net Profit after Interest and Tax ₹ 6,00,000; 10% Debentures ₹ 10,00,000; Tax @ 40%; Capital Employed ₹ 80,00,000.

y Ltd.'s profit after interest and tax was ₹ 1,00,000. Its Current Assets were ₹ 4,00,000; Current Liabilities ₹ 2,00,000 ; Fixed Assets ₹ 6,00,000 and 10% Long-term Debt ₹ 4,00,000. The rate of tax was 20%. Calculate 'Return on Investment' of Y Ltd. 

Calculate Return on Investment (ROI) from the following details: Net Profit after Tax ₹ 6,50,000; Rate of Income Tax 50%; 10% Debentures of ₹ 100 each ₹ 10,00,000; Fixed Assets at cost ₹ 22,50,000; Accumulated Depreciation on Fixed Assets up to date ₹ 2,50,000; Current Assets ₹ 12,00,000; Current Liabilities ₹ 4,00,000.

From the following information, calculate ‘Return on Investment’:

Net profit after tax was ₹ 3,00,000, and the tax amounted to ₹ 1,00,000.

From the following information, calculate Return on Investment (or Return on Capital Employed):

Net Profit before tax = ₹ 6,00,000

State with reason whether the following transactions will increase, decrease or not change the ‘Return on Investment’ Ratio:
(i) Purchase of machinery worth ₹ 10,00,000 by issue of equity shares of 10 each at par.
(ii) Charging depreciation of ₹ 25,000 on machinery.
(iii) Redemption of debentures by payment of ₹ 2,00,000.
(iv) Conversion of 9% Debentures of ₹ 1,00,000 into 10% Debentures of 100 each at par.

Calculate ‘Quick Ratio’ and ‘Debt-Equity Ratio’ from the following information:

Calculate Revenue from operations of BN Ltd. From the following information:

Goods were sold at a profit of 25% on cost.

Opening Inventory ₹80,000; Purchases ₹4,30,900; Direct Expenses ₹4,000; Closing Inventory ₹1,60,000; Administrative Expenses ₹21,100; Selling and Distribution Expenses ₹40,000; Revenue from Operations, i.e., Net Sales ₹10,00,000. Calculate Inventory Turnover Ratio; Gross Profit Ratio; and Opening Ratio.

From the given information, calculate:

1. Trade Receivables Turnover Ratio,
2. Current Ratio.

From the following information obtained from the books of Kamal Ltd.,
Calculate:

1. Gross Profit Ratio
2. Net Profit Ratio

From the following information, calculate:

1. Return on Investment Ratio.
2. Net Assets Turnover Ratio.

Calculate following ratios on the basis of the following information:
(i) Gross Profit Ratio;
(ii) Current Ratio;
(iii) Acid Test Ratio; and 
(iv) Inventory Turnover Ratio.

Calculate the following ratios on the basis of the given information:

1. Current Ratio;
2. Acid Test Ratio;
3. Operating Ratio;
4. and Gross Profit Ratio.

On the basis of the following information, calculate:

From the following information related to Naveen Ltd., calculate (a) Return on Investment and (b) Total Assets to Debt Ratio:
Information: Fixed Assets ₹ 75,00,000; Current Assets ₹ 40,00,000; Current Liabilities ₹ 27,00,000; 12% Debentures ₹ 80,00,000 and Net Profit before Interest, Tax and Dividend ₹ 14,50,000. 

From the following, calculate (a) Debt to Equity Ratio; (b) Total Assets to Debt Ratio; and (c) Proprietary Ratio:
 

From the given information, calculate the following ratios:

1. Operating Ratio and
2. Inventory Turnover Ratio

Information:

Calculate Current Assets and Quick Assets of a company from the following information:

Quick Ratio = 0.70: 1

Inventory Turnover Ratio = 5 Times

Inventory at the end was 20,000 more than inventory at the beginning

Gross Profit = ₹ 75,000

Current Liabilities = ₹80,000

Revenue from Operations = ₹ 4,00,000.

Quick Ratio falls under the group of ______.

The two basis to measure Liquidity Ratios are ______.

Working capital of King Ltd. is ₹ 2,00,000, and its Current Assets are ₹ 6,00,000. What is its Current Ratio?

Current Ratio of Venus Ltd. is 3 : 2. lt is to be maintained at 2 : 1. Which of the following options are available?

1. He can repay bills payable
2. He can purchase goods on credit
3. He can take a short-term loan

Choose the correct option:

A transaction involving an increase in Current Ratio and no change in Working Capital if Current Ratio is 2 : 1, is ______.

Which of the following is correct?

1. Net Profit = Revenue from Operations − Cost of Revenue from Operations − Operating Expenses − Non-Operating Expenses + Non-operating Incomes.
2. Net Profit = Revenue from Operations − Operating Cost − Non-operating Expenses + Non-operating Incomes.
3. Net Profit = Operating Profit − Non-operating Expenses + Non-operating Incomes.

Credit Revenue from Operations of Star Ltd is ₹ 5,20,000, Closing Trade Receivables are ₹ 80,000, and Opening Trade Receivables are 3/4th of Closing Trade Receivables.

Trade Receivables Turnover Ratio of Star Ltd. will be ______

Profit after Interest and Tax: ₹ 1,05,000; ₹ 5,000, 8% Redeemable Debentures of ₹ 100 each; 10% Preference Shares of ₹ 100 each; ₹ 3,00,000, ₹ 20,000 Equity Shares of ₹ 10 each; Tax Rate 50%. Return on Investment will be ______.

Cost of Revenue from Operations

Purchases

Opening Inventory

Inventory Turnover Ratio will be

Assertion (A): The ability of the business to pay the amount due to current liabilities as and when it is due is known as profitability.

Reason (R): Solvency of a business is determined by its ability to meet its contractual obligation towards long-term debts.

In the context of above two statements, choose the correct option from the following:

Jia Ltd. has a Gross Profit Ratio of 20%. To maintain this ratio at 30%, management may

Match List I (Accounting Ratios) with List II (Formula of Ratios) and select the correct answer using the codes given below the Lists:

Opening Trade Payables 1/3rd of Closing Trade Payables, Closing Trade Payables 12.5% of Net Credit Purchases, Net Credit Purchases ₹ 3,60,000. Trade Payables Turnover Ratio will be ______.

On the basis of following information, Capital Employed is:

Total Assets: ₹ 8,80,000, Non-current Assets: ₹ 4,00,000; Current Ratio = 6 : 1.

Shareholders’ funds ₹ 80,000, Total Debt ₹ 1,80,000, Current Liabilities ₹ 20,000. Total Assets Debt Ratio will be ______.

The Current Ratio of Sana Ltd. is 2 : 1. Which of the following transactions will reduce the Current Ratio?

Quick Ratio of Galaxy Ltd. is 2 : 1. State giving reason, which of the following will improve, reduce or not change the ratio: 19.

1. Purchase of Stock-in-Trade for cash.
2. Cash collected from Trade Receivables.
3. Cash Sale of Inventory (Costing 20,000) for 22,000.
4. Sale of an office furniture (Book value ₹ 10,000) for ₹ 9,000 for cash.

Debt to Equity Ratio is 2. State giving reason, whether this ratio will increase or decrease or will not change in each of the following cases:

1. Purchase of a Fixed Asset on a credit of 3 months.
2. Sale of Fixed Asset (Book value 40,000) at a loss of ₹ 10,000 against cheque.
3. Cash Sale of Fixed Asset (Book Value ₹ 40,000) for ₹ 50,000.
4. Sale of Fixed Asset (Book Value ₹ 40,000) for ₹ 40,000.

Assume that the Fixed Assets Turnover Ratio is 2 Times. State giving reason, which of the following transactions would (i) Increase; (ii) Decrease; or (iii) Not change the ratio:

1. Purchased fixed assets for ₹ 5,00,000.
2. Goods purchased for ₹ 2,00,000 on credit.
3. Sold goods costing ₹ 1,50,000 at a profit of 20%.
4. Machinery sold for ₹ 5,00,000 at a loss of 50,000.
5. Issued equity shares of ₹ 10,00,000.

Assertion (A): Profitability Ratios are calculated to analyse the earning capacity of the business.

Reason (R): Profitability Ratios are calculated to determine the ability of the business to service its debt in the long run.

In the context of the above two statements, which of the following is correct?

Opening Inventory ₹ 60,000; Inventory at the end ₹ 1,00,000; Inventory Turnover Ratio 8 Times; Selling Price 25% above cost. Calculate Gross Profit Ratio.

Calculate Fixed Assets Turnover Ratio from the following data:

Capital Employed: ₹ 22,00,000; Current Assets: ₹ 6,00,000; Current Liabilities: ₹ 4,00,000; Cost of Revenue from Operations: ₹ 24,00,0000; Gross Profit Ratio is 25%.

Calculate Operating Profit Ratio if Operating Ratio is 20%.

Current Liabilities ₹ 1,60,000, Liquid Ratio is 1.5 : 1 and Current Ratio 2.5 : 1. Calculate Inventory (Stock), Quick Assets and Current Assets.

Revenue from Operations ₹ 7,20,000, Gross Profit 20% on Revenue from Operations, Operating Expenses ₹ 36,000. Calculate Operating Profit Ratio.

Inventory in the beginning of the year ₹ 60,000; Inventory at the end of the year ₹ 1,00,000. Inventory Turnover Ratio 8 Times; Selling price 25% above cost.

Compute the amount of Gross Profit and Revenue from Operations.

Star Ltd.’s profit after Interest and Tax was ₹ 2,50,000. Its Current Assets were ₹ 10,00,000; Current Liabilities ₹ 5,00,000; Property, Plant and Equipment and Intangible Assets ₹ 15,00,000 and 10%, Long-term Debt ₹10,00,000. Tax Rate was 20%.

Calculate Return on Investment and Interest Coverage Ratio of Star Ltd.

Alder Tree Ltd. and Credar Ltd. use different accounting policies for inventory valuation. These variations leave a big question mark on the cross-sectional analysis and comparison of these two firms was not possible.

Identify the limitation of Ratio Analysis highlighted in the above situation. Also explain any two other limitations of Ratio Analysis apart from the one identified above.